UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission file number 33-73004
HOSTING SITE NETWORK INC.
-----------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-4122844
------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
32 POPLAR PLACE
FANWOOD, NEW JERSEY 07023
---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(973) 652-6333
-------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days. Yes |X| No | |
As of August 12, 2002, there were 6,023,500 shares of the issuer's
common stock, par value $0.001, issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes | | No |X|
HOSTING SITE NETWORK INC.
JUNE 30, 2002 QUARTERLY REPORT ON FORM 10-QSB
TABLE OF CONTENTS
PAGE
----
Special Note Regarding Forward Looking Information ..................3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements ................................................4
Item 2. Plan of Operation....................................................9
PART II - OTHER INFORMATION
Item 2 Changes in Securities and Use of Proceeds...........................10
Item 6. Exhibits and Reports on Form 8-K....................................10
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
To the extent that the information presented in this Quarterly Report
on Form 10-QSB for the quarter ended June 30, 2002 discusses financial
projections, information or expectations about our products or markets, or
otherwise makes statements about future events, such statements are
forward-looking. We are making these forward-looking statements in reliance on
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Although we believe that the expectations reflected in these
forward-looking statements are based on reasonable assumptions, there are a
number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These risks and uncertainties
are described, among other places in this Quarterly Report, in "Plan of
Operation".
In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or circumstances after the date of this Quarterly
Report. When considering such forward-looking statements, you should keep in
mind the risks referenced above and the other cautionary statements in this
Quarterly Report.
3
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PAGE
Consolidated Balance Sheets as at June 30, 2002 and September 30, 2001......5
Consolidated Statements of Operations for the three and nine months ended
June 30, 2002 and 2001and for the period from May 31, 2000
(inception) to June 30, 2002.........................................6
Consolidated Statements of Cash Flows for the nine months ended June 30, 2002
and 2001 and for the period from May 31, 2000
(inception ) to June 30, 2002........................................7
Notes to Consolidated Financial Statements..................................8
4
Hosting Site Network, Inc. and Subsidiary
(A Development Stage Company)
Hosting Site Network, Inc. and Subsidiary
Consolidated Balance Sheets
June 30 September 30
2002 2001
---- ----
(Unaudited)
Assets
------
Current assets:
Cash .................................... $ 21,584 $ 35,045
--------- ---------
Total current assets .................... 21,584 35,045
--------- ---------
Other assets:
Computers and equipment (net of
accumulated depreciation of
$4,250 and $215 ....................... 24,086 28,336
--------- ---------
Total assets ...................... $ 45,670 $ 63,381
========= =========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable and accrued liabilities $ 18,580 $ 1,298
Note payable ............................ 25,000 0
--------- ---------
Total liabilities ..................... 43,580 1,298
--------- ---------
Shareholders' equity:
Common stock, 100,000,000 shares
authorized; 6,023,500 shares
issued and outstanding; par value $.001 $ 6,023 $ 6,023
Preferred stock, 5,000,000 shares
authorized; -0- shares issued
and outstanding; par value $.001 ...... 0 0
Additional paid in capital .............. 259,509 259,509
Deferred stock based compensation ....... (102,822) (133,434)
Retained earnings (deficit) ............. (160,620) (70,015)
--------- ---------
Total shareholders' equity .......... 2,090 62,083
--------- ---------
Total liabilities and shareholders'
equity ............................ $ 45,670 $ 63,381
========= =========
See accompanying Notes to Financial Statements.
5
Hosting Site Network, Inc. and Subsidiary
(A Development Stage Company)
Hosting Site Network, Inc. and Subsidiary
Consolidated Statements of Operations
(Unaudited)
Period from
May 31, 2000
Three Months Ended Nine Months Ended (inception) to
June 30, June 30, June 30,
2002 2001 2002 2001 2002
---- ---- ---- ---- ----
Revenues:
Net sales ....................... $0 $0 $0 $0 $0
Expenses:
General and administrative ...... 23,551 17,598 90,781 22,689 162,260
-------- --------- --------- ----------- -----------
Total Expenses ................ 23,551 17,598 90,781 22,689 162,260
-------- --------- --------- ----------- -----------
Other Income:
Interest ........................ 53 322 176 1,029 1,640
-------- --------- --------- ----------- -----------
Net (loss) ........................ ($23,498) ($17,276) ($90,605) ($21,660) ($160,620)
======== ========= ========= =========== ===========
Net (loss) per share:
Basic ........................... ($0.01) ($0.01) ($0.03) ($0.01)
========= ========= ========= ===========
========= ========= ========= ===========
Weighted average common shares
used in calculation of net loss
per share ..................... 3,023,500 2,623,665 3,023,500 2,087,119
========= ========= ========= ===========
See accompanying Notes to Financial Statements.
6
Hosting Site Network, Inc. and Subsidiary
(A Development Stage Company)
Hosting Site Network, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
Period from
May 31, 2000
Nine Months Ended (inception)
June 30, June 30,
2002 2001 2002
---- ---- ----
Cash flows from operating activities:
Net loss ................................................................. ($90,605) ($21,660) ($160,620)
Adjustments to reconcile net loss
to cash provided (used) for operating activities:
Depreciation ............................................................. 4,250 61 4,465
Stock based compensation ................................................. 30,612 6,577 38,606
Common stock issued for services ......................................... 0 0 10,000
--------- --------- ---------
(55,743) (15,022) (107,549)
Increase (decrease) in operating accounts payable
and accrued liabilities ................................................ 17,282 18,580
--------- --------- ---------
Cash provided (used) for operating activities ........................ (38,461) (15,022) (88,969)
--------- --------- ---------
Cash flows from investing activities:
Investment in property and equipment ..................................... 0 0 (40,402)
--------- --------- ---------
Cash used by investing activities .................................... 0 0 (40,402)
--------- --------- ---------
Cash flows from financing activities:
Proceeds of private placement offering net of
$0, $26,261 and $26,261 direct costs ................................... 0 125,955 125,955
Proceeds from note payable ............................................... 25,000 0 25,000
--------- --------- ---------
Cash provided (used) for financing activities ........................ 25,000 125,955 150,955
--------- --------- ---------
Increase (decrease) in cash .............................................. (13,461) 110,933 21,584
Cash, beginning of period ................................................ 35,045 0 0
--------- --------- ---------
Cash, end of period ...................................................... $21,584 $110,933 $21,584
========= ========= =========
Supplemental Disclosure of non-cash investing and financing activities:
Common stock issued for acquisition ...................................... $0 $0 $6,295
========= ========= =========
Equipment written off-net ................................................ $11,851 $11,851
========= =========
Receivable from shareholders in
connection with subscription
from common stock ...................................................... $0 $600 $600
========= ========= =========
Issuance of common stock for services .................................... $10,000
=========
Issuance of common stock for deferred
offering costs ......................................................... $0 $10,000 $10,000
========= ========= =========
Cancellation of stock purchased back ..................................... $0 $0 ($5,652)
========= ========= =========
Direct placement costs ................................................... $1,649 $1,649
See accompanying Notes to Financial Statements
7
Hosting Site Network, Inc. and Subsidiary
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
The accompanying consolidated financial statements include the accounts of
Hosting Site Network, Inc. (a development stage company) and its wholly owned
subsidiary HSN (NJ), Inc.. All material intercompany balances and transactions
have been eliminated. The interim statements are unaudited and, in the opinion
of management, include all adjustments (which include only normal recurring
adjustments) necessary to present fairly the Company's financial position as of
June 30, 2002 and the results of its operations and cash flows for the interim
periods presented. The consolidated balance sheet data for September 30, 2001
are derived from the audited financial statements that are included in the
Company's Form SB-2(A) Registration Statement filed on January 18, 2002, which
should be read in connection with these financial statements.
The accounting policies followed in the presentation of the interim financial
results are the same as those followed on an annual basis. Those policies are
presented in Note 3, "Significant Accounting Policies to the consolidated
financial statements included in the Company's annual report in the
above-mentioned Form SB-2(A) Registration Statement.
The interim financial results as of the nine months ended June 30, 2002 are not
necessarily indicative of the results that will be obtained for the year ending
September 30, 2002.
2. SUPPLEMENTAL CASH FLOW INFORMATION
-------------------------------------------
June 30 June 30
2002 2001
---- ----
Cash paid during the three months for:
Interest ........................... $-- $--
==== ====
Income taxes ....................... $-- $--
==== ====
3. NOTE PAYABLE
---------------------
On April 11, 2002 the Company borrowed $25,000 from a finance company with
interest at 10% which is unsecured and is due one year from its date of
origination.
4. SHAREHOLDERS' EQUITY
-----------------------------
On March 6, 2002 the Board of Directors of Hosting Site Network, Inc. approved a
plan, and amended its certificate of incorporation, to increase the Company's
authorized capital. The new capitalization plan calls for an increase in
authorized common stock from 20,000,000 shares to 100,000,000 shares and for an
increase in authorized preferred stock from 1,000,000 shares to 5,000,000
shares.
5. EARNINGS PER SHARE
---------------------------
The weighted average number of common shares used in calculation of net loss per
share for the 2001 amounts have been restated to reflect the purchase and
retirement of 4,600,000 shares from the original shareholder in April 2001.
8
ITEM 2. PLAN OF OPERATION
The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in this
Quarterly Report. Certain statements in this Quarterly Report which are not
statements of historical fact are forward-looking statements. See "Special Note
Regarding Forward-Looking Information" on Page 3.
We were incorporated on May 31, 2000 to provide businesses with a
variety of Internet services including web hosting, web consulting and
electronic mail services. Given the current Internet business environment, we
have not commenced material business operations, have not had any operating
revenues, and have concluded that our business model is not presently valid.
Although we may determine to engage in our intended Internet operations at a
later date, we have decided to look at other ventures of merit for corporate
participation as a means of enhancing shareholder value. This may involve sales
of our equity or debt securities in merger or acquisition transactions.
We have minimal operating costs and expenses at the present time due
to our limited business activities. Accordingly, absent changed circumstances,
we will not be required to raise additional capital over the next twelve months,
although we may do so in connection with or in anticipation of possible
acquisition transactions. We do not currently engage in any product research and
development and have no plans to do so in the foreseeable future. We have no
present plans to purchase or sell any plant or significant equipment. We also
have no present plans to add employees although we may do so in the future if we
engage in any merger or acquisition transactions.
9
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
No equity securities were sold by us during the period covered by this
Report. During the period subsequent to such period, in July 2002, we completed
a private offering of 1,250,000 units at a price of $.40 per unit or $500,000 on
an aggregate basis. Each unit consisted of one share of our common stock and one
common stock purchase warrant, each of which is exercisable for the purchase of
one share of our common stock at anytime during a period of five years from
issuance at a price of $1.20 per share. The units were sold pursuant to Rule 506
of Regulation D of the General Rules and Regulations under the Securities Act of
1933, as amended. The shares constituting part of the units have not yet been
issued but are expected to be issued shortly.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
10
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
HOSTING SITE NETWORK INC.
Dated: August 14, 2002 By: /s/ Scott Vicari
--------------------------------
Scott Vicari
President, Chief Executive and
Accounting Officer
The undersigned, the Chief Executive and Accounting Officer of the
Registrant, certifies that this Report complies with all of the requirements of
Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, and
the information contained in this Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.
Dated: August 14, 2002 By: /S/ Scott Vicari
---------------------------------
Scott Vicari
11